The consideration works out to ~11x trailing (FY13) EBITDA – which is the same as the value we ascribe to W&M in our SoTP. Our stance has been that this valuation was appropriate, given the business profile of a combination of bulk scotch, private label & branded sales.

The stock has languished at current levels for almost a year now, essentially implying that both contingent outcomes (W&M sale + open offer) were priced in far ahead. We think fundamentals could remain challenging for the next 12-18 months as discretionary consumption remains soft and competitive pressures continue to escalate steadily.

In our view, the W&M outcome is lower than market expectations. At Rs3,030, the stock is valued at ~75x/47x our FY15E/FY16E earnings. Even after factoring in the interest cost savings from W&M, the P/E dips slightly to ~68x/42x – still a very sharp premium to peer group (>100% premium).